The Barchart National Corn Price Index (NCPI, weighted national average cash price) extended its major (long-term) downtrend to a new 4-month low near $6.37 before rallying back to $6.61 to close out September. While it would not be surprising to see the NCPI rally, a move that would be viewed as Wave B (second wave) of the major 3-wave downtrend pattern, the next downside target is still near $6.02. This brings to mind corn’s characteristic Round Number Reliance. A possible rally has upside targets near $7.20, $7.40, and $7.70.
December Corn: The 2022 contract looks to be in Wave B (second wave) of its 3-wave downtrend after posting a high of $6.9950 during September. This was the second consecutive higher month within the major downtrend, so if we see a Benjamin Franklin Fish Similarity develop it would suggest another higher close in October. Given the market’s bullish futures spreads, it’s possible Dec22 could extend this Wave B to near $7.22, though all Indications the $7.6625 high from May is safe, at least until the 2022 issue moves into delivery. Then all bets are off until the chart rolls to the 2023 contract. For the record, Dec23 closed September at $6.1675.
The Barchart National Soybean Price Index (NSPI, intrinsic value of the market) extended its major downtrend to a low of $13.13 during September. This took out the initial downside target near $13.4150, with the next near $12.20. This is the 50% retirement level of the previous uptrend from $7.0697 (May 2019) through the high of $17.3377 (June 2022). Monthly stochastics remain bearish and well above the oversold level of 20% indicating there is plenty of time and space for the NSPI to move lower, despite continued bullish fundamentals indicated by the weak carry in soybean futures spreads.
November Soybeans: The November 2022 contract is in a major downtrend as well, though holding well above support at the initial downside target near $12.8950. This price marks the 38.2% retracement level of the previous uptrend from $8.1225 (September 2018) through the high of $15.8475 (June 2022). Note the latter was part of a key bearish reversal. Given market fundamentals remain long-term bullish, eventually November futures should pull back to the 50% retracement level of $11.9850. However, this will likely be the 2023 issue that closed September at $13.41.
